American Eagle Outfitters, Inc. announced its official financial results for the first quarter ended May 3, 2025, on May 29, 2025, confirming a challenging period. Total net revenue decreased 5% year-over-year to $1.09 billion, with comparable sales declining 3%, including a 4% drop for Aerie and a 2% drop for American Eagle.
The company reported a GAAP operating loss of $85.2 million and an adjusted operating loss of $68 million, primarily driven by a $75 million inventory write-down on spring and summer merchandise and increased promotional activity. Gross margin plummeted to 29.6% from 40.6% in the prior year, also impacted by increased product costs and deleveraged buying, occupancy, and warehousing expenses.
Selling, general and administrative expenses increased 2% to $338.8 million, partly due to higher advertising spend. Impairment and restructuring charges of $17.1 million were incurred for supply chain optimization, including closing two fulfillment centers. The company's fiscal year 2025 outlook remains withdrawn, but it provided Q2 FY25 guidance, expecting revenue to be down 5%, comparable sales down 3%, and operating income between $40 million and $45 million. Capital expenditures for FY25 were revised to approximately $275 million from $300 million.
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